Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Can sections 74.1(1) or 74.2(1) apply where property is transferred by an individual to his or her spouse's RRSP?
Position: Yes.
Reasons: Attribution if exception in paragraph 74.5(12)(a) does not apply.
XXXXXXXXXX 2000-005126
G. Kauppinen
November 23, 2000
Dear XXXXXXXXXX:
Re: Contribution to Registered Retirement Savings Plan ("RRSP") of Spouse
This is in reply to your facsimile transmission dated October 15, 2000 regarding the above-noted subject.
We confirm the following with respect to the specific questions you have asked assuming an individual transfers property as a payment of a premium to the RRSP trust of his or her spouse and that premium is not deductible in computing the income of the individual for any taxation year:
1. Subsections 74.1(1) and 74.2(1) of the Income Tax Act ("Act") will apply to attribute, to the individual, income or losses and taxable capital gains or allowable capital losses from the property (or property substituted therefore ) transferred to his or her spouse's RRSP trust. Paragraph 74.5(12)(a) of the Act will not apply to exclude this transfer of property from the attribution rules because of the assumption that the premium is not deductible by the transferor for any taxation year.
2. The transfer will be considered to be a disposition at fair market value by virtue paragraph 69(1)(b) of the Act and paragraph (c) of the definition of "disposition" in section 54 of the Act.
3. Any loss realized on the transfer of the property to the RRSP trust would be denied by virtue of clause 40(2)(g)(iv)(B) of the Act.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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